What is a Landlord Insurance Policy?

Landlord insurance, explained.

Whether you’re thinking of renting your property, or you’re already finding your feet as a first-time landlord, there’s lots to consider. Not least, what protection you need.

When it comes to insurance cover, one of the most common questions is what is a landlord insurance policy? 

You’ve probably heard about landlord insurance, but what does it actually cover? And if you’ve already got buildings and contents protection, do you really need an extra policy?

Well, becoming a landlord involves a lot of responsibility, and there are plenty of scenarios that aren’t included in standard home insurance policies. In this guide, we explain why a landlord insurance policy is a must-have for safeguarding your rental property.

What does landlord insurance cover?

In short, landlord insurance protects landlords from risks associated with their rental business. It’s essentially a catch-all term for lots of different types of cover that might be useful to landlords. This type of insurance is sometimes also known as “buy-to-let insurance”.

It’s similar to ordinary home insurance policies, but includes coverage for common issues landlords face. This could include things like loss of rental income or protection for legal defence costs associated with evictions or tenant claims.

Is it worth having landlord insurance? Imagine the scenario: 

Your property is damaged (for example, in a flood or fire) and left uninhabitable until repairs happen. Your tenants have to move out, and you’re not receiving any rental income. Repairs might take six months, but you still have to pay your mortgage. 

Do you have the savings to cover these mortgage payments as well as the cost of repairs and maintenance issues? Many people wouldn’t…

This is where landlord insurance comes in.

Landlord insurance normally includes things like buildings and contents insurance. This covers the rebuild value of your property and any ruined items. 

As well as this, you can also get landlord-specific protection for things like loss of rent, tenant damage and property owners’ liability cover. It gives peace of mind that your property business is protected for the long run.

What insurance do you need as a landlord?

Here are the main types of landlord insurance and the level of coverage they provide.

  • Landlord Buildings Insurance: Like standard buildings insurance, this covers the rebuilding cost if the structure of your property is seriously damaged. This kind of insurance is required by almost all mortgage lenders — so it’s the only one that’s essential.
  • Landlord Contents Insurance: Useful if you’re renting your property on a furnished basis. This type of insurance covers things like white goods and large furniture items, in case of major damage or theft.
  • Rent Guarantee Insurance: There are a few different types of rental protection insurance, but this is one of the most common. It covers unpaid rent. It’s sometimes also known as “tenant default insurance” and means your insurer pays out if your tenants are in rent arrears for any reason.
  • Property Owners’ Liability insurance (POL): If a tenant, visitor or another third party sues you because a problem with the property causes personal injury, illness or death, this type of cover gives you protection. If you employ people to help with your business, “landlord employers liability insurance” also covers employee compensation claims. It’s not always necessary, but some local councils ask landlords to have legal liability insurance.

Depending on your situation (and the cover your insurance company offers), you might include:

  • Home Emergency Cover: This covers a wide range of emergency repairs such as a water pipe bursting, boiler breakdowns or damaging break-ins. You can choose various levels of cover, including policies that payout for the cost of alternative accommodation as well as access to tradespeople.
  • Accidental Damage Insurance: You may not need this if your contents insurance already includes accidents. This policy gives extra financial protection in case your property or items are destroyed (caused by people). It doesn’t cover standard “wear and tear” or theft, though.
  • Tenant Malicious Damage: Wondering “does landlord insurance cover tenant damage?” It can! Similar to “accidental damage”, this makes sure you’re covered for any intentional tenant damage to your buy-to-let property. It includes damage to things like fittings, fixtures and carpets that aren’t covered by your tenancy agreement deposit.
  • Loss of Rent Insurance: Related to “rental guarantee insurance”, this type of insurance means you’re covered for financial losses if your property becomes uninhabitable. You could also look at “unoccupied insurance” cover, which means you’re protected during periods without tenants.
  • Legal Expenses Cover: This is a common add-on to “property owners’ liability” insurance — taking care of legal costs associated with a claim or legal action against you. It’s often included in landlord insurance policies as standard, however, so check with your insurance provider.
  • Multi-Property Cover: Sometimes known as “property portfolio insurance”, this is a type of policy that lets you insure more than one property. You can normally include up to 15 properties at first. Depending on the terms and conditions of your policy, you can add more properties over time.

For more in-depth information about the different types of landlord insurance (and what cover is best for you), read: What landlord’s insurance do I need?

How much does landlord insurance cost?

The costs of specialist landlord insurance differ massively, depending on the risks associated with your property and tenants. The number of residential properties you’re insuring, the type of landlord insurance products you choose and the provider you go with will also impact costs.

As with all types of insurance (whether for cars, boats or people), an insurer will calculate your premium (that’s the cost of your insurance policy) based on factors such as the likelihood and possible costs of claims.

The best way to find out how much landlord’s insurance costs is to ask for a bespoke quote. 

You can easily get a quote from one of A-Plan’s specialist insurance advisors by filling in our short form.

We know it can be hard for property owners and first-time landlords to find a competitively priced policy that suits their needs. That’s why we offer policies tailored to your unique circumstances with a swift and efficient claims system. As well as buildings and contents insurance, we can also arrange extra optional covers for landlords such as legal protection insurance and rental income protection.

Is landlord insurance compulsory?

You might be surprised to discover that landlord insurance isn’t a legal requirement.

There is no legal obligation for residential landlords to take out a dedicated landlord insurance policy. 

Even so, a standard home insurance policy won’t include rental activities. So if you’re renting a house or apartment (or even just a room to a family member), adequate cover is sensible.

What’s more, if you’ve got a mortgage on your property, your lender will normally make a dedicated landlord policy part of your agreement. This means if you take on tenants (without the right cover in place), you could be breaking the terms of your mortgage.

You’ll need written permission from your mortgage provider before you start letting out a property. This will usually be in the form of a specific buy-to-let mortgage agreement, which includes requirements about having landlords buildings insurance policy in place. 

Optional add-ons (like accidental damage and employers’ liability protection) are usually down to you. Some mortgage lenders might also include stipulations on things like rental income protection, however.

Some local councils also ask commercial landlords to have Public Owners’ Liability (POL) insurance in place. If you’re unsure of regulations and legal advice for your area, check with your local authority.

How can I get a landlord insurance policy?

The simplest way to get a landlord insurance policy is to contact providers directly.

At A-Plan, we’ve specialised in landlords insurance for many years. As a result, we’ve developed a panel of leading insurers to offer you plenty of choice at competitive prices. To find out more about our landlord insurance policies for your rental property, contact our friendly and knowledgeable advisors.

As well as contacting insurance providers directly, you can also work with a specialist insurance broker. Due to their industry-specific knowledge, brokers can help you find a cost-effective landlord insurance policy that’s tailored to your needs.

And you can also use price comparison websites to compare deals from various providers. This can be a quick and easy method of getting a rough idea of costs and providers — however, results might not be tailored to your specific circumstances. So once you’ve got an idea of the policies you want (and preferred providers), it’s a good idea to get in touch directly.

Also read:
What is landlord rent guarantee insurance?
Do I need landlord building insurance?
A guide for buy-to-let landlords